He is chairman of the Federal Deposit Insurance Corporation (F.D.I.C.). Moreover, he has been in a top leadership role at the F.D.I.C. for almost twenty years. But as a leader of any sort, anywhere, Martin Gruenberg is on his last legs. He is in any case slated to step down from his present post as soon as President Biden can name a successor.
Gruenberg agreed to resign only very reluctantly. Moreover, given there are politics involved – to keep the F.D.I.C. in line with Biden’s agenda the Democrats must continue to control three of the five board votes – the president was not keen to replace him. But so far as his underlings are concerned, Gruenberg’s departure cannot come soon enough. They were the ones who threw him under the bus – followers who rebelled against their leader.
In America incidents of follower power have gone from being very rare to not so rare. The recent spate of campus unrest is an example of how increasingly subordinates take on their superiors. But Gruenberg’s turned out a textbook case of how people without power and authority can and now do take on those with.
Gruenberg agreed to resign only after the chair of the Senate Banking Committee called for him to do so. After reviewing a report that was commissioned in response to an investigation by the Wall Street Journal, and hearing some of Gruenberg’s subordinates testify, Senator Sherrod Brown said he was left with one conclusion: “There must be fundamental changes at the F.D.I.C. Those changes begin with new leadership, who must fix the agency’s toxic culture and put the women and men who work there – and their mission – first.”
The report by a prominent law firm, Cleary Gottlieb, concluded that the F.D.I.C. was a “patriarchal, insular, and risk-averse culture” where management’s responses to misconduct were “insufficient and ineffective.” While Gruenberg was not the sole target, he was held responsible for a workplace that had long since been unpleasant to the point of being uncomfortable. Moreover, some of the attacks on him were personal, not just managerial. Gruenberg was said to have an “explosive temper” and to be “misogynistic.” His promise during the Senate hearing to take an anger management course was under the circumstance preposterous – far too little, far too late.
Changes in technology, and in culture, are key to understanding why Gruenberg fell. Both have emboldened followers at the expense of leaders. Moreover, both have made it easier, and more acceptable, for those without authority to take on those with. Here is the sequence they make possible.
- Step 1: Information. Information used to be the private preserve of people with power and, or, authority. No longer.
- Step 2. Expression. Expression once was available only to those granted permission. Now most can speak, and most can be heard, anywhere in the world.
- Step 3. Communication. In the past it was impossible for people in large groups and organizations to communicate with each other. Those days are over – many if not most of us can connect, one to another, in an instant.
- Step 4. Action. Information prompts expression. Expression prompts communication. Communication can and sometimes does prompt action.
It’s a sequence to which Martin Gruenberg can testify. Within the F.D.I.C. information about him and his management style was eventually widely distributed. Employees at the agency were increasingly willing to express their anger and frustration, in some cases so loudly everyone could hear. Eventually one complainant connected with another, and then another and another. Finally, action was taken. Which is why Gruenberg’s time at the top was finally, humilatingly, up.